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One of the themes of Amsterdam Cocoa Week was ‘scanning the room,’ a kind of well-being exercise to check in with fellow attendees, to see who was here, who was not, who should be, was everyone OK, etc. Had this kind of exercise been performed when the WCF PM last convened in October 2022, then the absence of Koné and Aidoo would have been noted as the two regulators boycotted the event due to an ongoing row with the chocolate industry on farmer income.
It was left to the diplomatic Michel Arrion, chief executive of the International Cocoa Organization (ICCO) and moderator of this panel, to smooth the way back to more cordial discussions with the two heads of the most prominent cocoa regulators in the world. He reminded attendees that they account for two-thirds of all global production and announced how pleased he was to welcome the two cocoa heavyweights back onto the sofa.
I’ve always said that we have a responsibility to cover the market’s needs. We feel a shared responsibility. So, we will take steps to bring the necessary supplies to the market — Yves Brahima Koné, Cote d’Ivoire’s Coffee & Cocoa Council director general,
Cocoa exports
Arrion began with the burning question in the room – the depleted global cocoa production levels and low bean exports from both countries over the past 18 months or so. Climate change and the environment were factors, but were there other mitigating factors for the shortfall in outputs?
Aidoo said that the deficit in Ghana has undoubtedly been influenced by climate change and the El Nino effect, particularly in the last three years.
“Cocoa is very responsive or sensitive to extreme weather conditions. When we have excessive rainfall, production goes up. When we have excessive dryness and drought, production goes down. And that’s what has happened in the last three years.
“The previous two years, we had severe dryness in Ghana, affecting our production from around 800,000 metric tonnes to approximately 600,000 metric tonnes.
“Last year, we had excessive rain again, and trees responded to that because when the soil is waterlogged, there’s no aeration around the roots, so nutrients cannot be well absorbed.”
He said it is a problem that farmers in his country are going to have to live with for a long time – along with the problem of cocoa swollen shoot virus (CSSV) disease, which has also devastated swathes of land, causing the country to lose almost over 500,000 hectares of productivity. COCOBOD invests significant sums of money to solve the problem as no individual farmer can tackle it.
Climate change
Koné said it was similar in neighbouring Cote d’Ivoire: “Since September 2022, we’ve given our forecasts and stated that production would be 20-25% down on last year’s campaign. We haven’t changed. I think the conditions are known … climate change and the aging of plantations, in general.
“I’ve been looking after the cocoa industry in Côte d’Ivoire for nearly seven years. As a major cocoa producer, I’ve always said that we have a responsibility to cover the market’s needs. We feel a shared responsibility. So, we will take steps to bring the necessary supplies to the market. As the regulator responsible for production issues simultaneously, we will do what we can to provide the appropriate answers to all the issues that fall within our remit.”
Koné announced he has called for a meeting in Abidjan with agroforestry researchers and others to examine the issues.
Aidoo also stressed that the issue isn’t the farmer’s alone responsibility. They are taking all the risks but receiving little of the rewards. “This dichotomy between the bean and the bar ought to be addressed, and it can only be addressed when we begin to see the programme as not an individual programme but a collective one.”
Cocoa prices
We’ve been speaking about living income for more than 20 years, and the farmers have still not seen one — Joseph Boahen Aidoo, CEO of the Ghana Cocoa Board
He said the other aspect has to do with farmers’ living income, which is also affecting the production dynamics that the industry is currently experiencing.
“If it is not well addressed, there cannot be sustainable production,” he warned.
He also said the new (and high) price of cocoa has not yet been reflected in farmers’ income, “we’ve been speaking about living income for more than 20 years, and the farmers have still not seen one.”
Koné agreed and told the industry executives and other stakeholders at the meeting: “These are small farmers. People make cocoa because their parents made cocoa, and their grandparents made cocoa. It’s more an attachment to the cocoa culture because cocoa doesn’t feed them. It’s not a business option for us, the small farmers; it’s a priesthood to make cocoa, but they don’t earn any money. That’s what we’ve been trying to explain to our cocoa partners, whether traders or manufacturers, for almost four to five years … that farmers need a decent income.”
Koné said that if prices fall people abandon their farmer. “With cocoa prices today, it’s clear that it’s imperative to encourage small farmers.”
He described himself as “an old hand at cocoa, and I don’t think many in the room are as old as I am. When, at one point, we talked about the problems of quotas, it was to protect the interests of both the consumer and the producer. But it didn’t work … because some market players thought they were smarter than others. The main function of the International Cocoa Organisation was broken. It was your role to regulate the market.”
EU Deforestation Regulation
On the forthcoming EUDR, Koné said: “We’ve been preparing for better management of the cocoa sector for several years. Even before the European Union drew up its rules, we had already identified our farmers, given them grower cards, and set cocoa plantings at 2018, 2019, and 2020 levels. The card is given to the growers for traceability purposes, but when someone uses a card, it has a cost, and after three years, the grower has to pay. We can’t keep carrying this burden. All the costs of traceability and all the requirements of European regulations have cost us a lot of money. These are expenses imposed on us by regulations, but we have no choice if we want to export cocoa to the European market. We have no one to help us.”
Aidoo said he thought that the EU regulation was inevitable and necessary. “We produce responsibly. But the point is that we are talking about smallholder farmers when it comes to cocoa production, especially those of us from West Africa.
“They cannot produce polygon maps and data. There’s no way these farmers will be able to do that. So, it brings responsibility to the government to take that on board. We’ve had a long discussion with EU reps on this matter because, again, the same principle … the EU is concerned about deforestation … the EU is concerned about child labour and environmental issues. Still, the EU did not factor in the cost, so who pays?
“In Ghana, we have come up with a national traceability system. Of course, private companies had their own individual traceability system, but these were silos, each doing his own thing. In Ghana, you are talking about 790,000 farmers.”
He said that, at best, private organizations have only mapped around 200,000 farmers.
“So COCOBOD and the government had to step in. Therefore, we’ve developed the Ghana traceability system, which is national and universal for Ghana. We’re about 80% complete, and hopefully, by October, we should have finished, but we have spent a fortune already, and we still have to spend a little bit more to complete it.”
He said that as this regulation is imposing an additional burden on production, the markets will have to pay, one way or another.
This discussion was one of many highlights from the recent WCF 2024 partnership meeting; for a summary of events, check out its latest newsletter.
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